A startling number landed in Amazon’s latest filings: the company’s “current U.S. taxes” — an accounting measure of taxes incurred last year — plunged to $1.2 billion from $9 billion a year earlier, even as pretax U.S. profit jumped 44.5% to $89.5 billion. On a cash basis, Amazon paid $2.8 billion in federal income taxes in 2025, down from more than $7 billion in each of the prior two years.
That's not a rounding error. It's the headline effect of last summer’s One Big Beautiful Bill Act (OBBBA), Congress’s most recent major tax overhaul, which expanded accelerated depreciation and other business-friendly deductions. For Amazon, those changes translated into an 87% drop in its federal tax bill — at the same moment the company was announcing mass layoffs that have affected roughly 30,000 workers since October.
Numbers that clash with the rhetoric
The optics are stark: record corporate profits, sharply lower taxes, and major job cuts. Amazon disclosed it eliminated some 16,000 corporate roles as part of restructuring that executives have framed as preparing the company to scale automation, robotics and AI. Critics say the math shows a playing field tilted toward incumbents.
Policy analysts at the Institute on Taxation and Economic Policy (ITEP) rounded the picture out: Amazon, Alphabet, Meta and Tesla collectively reported $315 billion in U.S. profits for 2025 but paid just 4.9% of that in federal corporate income taxes. ITEP estimates those four firms together avoided roughly $51 billion in federal taxes last year — much of it likely tied to OBBBA-era changes. Tesla, notably, reported paying exactly zero in federal income tax on its 2025 U.S. income.
Progressive voices warn the tax breaks didn’t appear out of nowhere. The Roosevelt Institute and other groups point out that lawmakers offset some of the revenue cost by trimming programs like Medicaid and elements of the Affordable Care Act — changes that, they argue, worsen financial strain for vulnerable families even as megacorporations see their tax bills fall.
Amazon pushed back in a statement, saying the tax outcomes “reflect... changes by Congress” aimed at encouraging investment and innovation in the American economy. The company and its allies frame accelerated write-offs and research-related deductions as incentives for capital spending — a claim that gains traction when you look at the broader tech industry’s investment plans.
Investment, AI and the longer arc
Big Tech is pouring money into AI and data-center infrastructure. Analysts have tracked a combined capital spending wave among major firms estimated in the hundreds of billions, a bet that building the backbone for generative AI will pay off over years. That arms race helps explain why firms argue they need richer depreciation rules: build fast, write it down fast.
But investment and worker dislocation are intertwined. Amazon’s push toward automation and AI-driven tools sits alongside industry announcements about new models and tooling. The race has already produced a flurry of product and platform efforts — from new in-house image models to deeper integrations of AI into productivity tools — that change how companies staff and operate. For context on how major vendors are pursuing model and tooling advances, see Microsoft’s recent in-house image model work and Google’s deeper stitching of AI into search and productivity workflows Microsoft Unveils MAI-Image-1 and Gemini Deep Research’s integration into Gmail and Drive.
That spending rush also has second-order effects: demand for electricity, data-center real estate and supply-chain capacity. Local and state budgets, meanwhile, feel the squeeze when large firms pay far less in federal taxes than their headline profits might imply.
Politics and policy friction
This episode lands at a politically charged moment. Proponents of the OBBBA-style changes say the tax code should reward investment, accelerate growth and keep U.S. firms competitive globally. Opponents counter that the structure of recent cuts disproportionately benefits large, highly profitable multinationals while reducing revenue available for health, education and safety-net programs.
What the filings make clear is that policy choices reverberate quickly. A law designed to accelerate depreciation and incentivize capital expenditures can produce immediate, material declines in corporate tax payments — even as firms boost investment and simultaneously pare payrolls.
If there’s a thread tying the numbers, the statements and the politics together, it’s this: lawmakers rewrote incentives, big corporations acted fast to take advantage of them, and ordinary workers and public services are now caught in the crossfire. The debate over whether those incentives will deliver broad-based, long-term benefits — or mainly pad corporate balance sheets today — is only just beginning to play out in boardrooms and Capitol Hill hearings alike.
Either way, the 2025 filings make the arithmetic hard to ignore: a handful of firms posted historic profits, their immediate federal tax bills fell sharply, and millions of voters and taxpayers are left to weigh whether the trade-offs were worth it.